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25 Cards in this Set
- Front
- Back
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The demand curve for a purely competitive firm is |
Perfectly elastic. |
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Know the types of profit that a competitive firm can earn in the short run. |
Anything can happen. |
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A competitive firm should increase output if |
MR>MC. |
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Entry is easiest into a |
Purely competitive market. |
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Monopoly is the |
Market structure wherein there is a unique product. |
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The AR and MR coincide for a |
Firm in pure competition. |
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Average revenue is the |
Same as the price for any firm. |
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The competitive firm faces a |
Perfectly elastic demand curve. |
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A competitive firm shuts down in the short run when |
TR<TVC. |
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A firm can continue to operate in the short run as long as |
Its revenue exceeds its fixed costs. |
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Know examples of the different types of industries. |
Stock exchange, cotton exchange, etc. |
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A competitive firm has |
No fixed costs in the long run. |
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At long-run equilibrium, a competitive firm |
Earns normal profits. |
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There is an under allocation of resources when |
P>MC. |
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A constant industry is one in which |
The process of resources are most affected by the entry or exit of firms. |
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For an increasing cost industry, resource prices increase when |
Production increases due to the entry of new firms. |
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Entry into an increasing-cost industry leads to a |
Rise in price and output. |
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A competitive firm will operate where |
P=minimum AC. |
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An optimal allocation of resources occurs when |
P=MC. |
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In a competitive industry having increasing-costs, the prices of resources fall when |
The industry contracts. |
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A monopolist will set price in the |
Elastic portion of the demand curve. |
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A monopolist must seal off his/her system of price discrimination to |
Prevent consumers from reselling the goods they buy. |
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A pure monopolist is a |
Price setter. |
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The demand curve facing a monopolist is |
Downward sloping. |
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Marginal revenue is less than average revenue in a monopoly because |
The firm has to lower price on all units sold in order to sell more units. |
